Was CRM weakness on AI cannibalization?
Is Q1 software weakness due to:
Not to lead the witness, but I just don’t buy the AI cannibalization…sure maybe that happens down the road, but I don’t think it’s happening yet.
For everyone blaming $Salesforce.com(CRM)$ weakness on AI cannibalization, who did the cannibalizing? In large enterprises they’re not rebuilding a crm with AI with some open source model…way too complicated to rip out an existing CRM and all the workflows associated with it. I don’t know if any “gen AI crm” stealing $100m in rev from Salesforce…
I think the answer is a slight combo of all - macro did get a bit weaker. Q4 budget flush did pull forward some Q1 spend, and then everyone a bit more cautious to really tap into 2024 budgets this early in the year.
And then on the AI cannibalization, it’s more of a “cautious buying” environment as everyone is waiting to see which AI tools emerge. Companies cautious to commit incremental spend to a “legacy” vendor who may be irrelevant in 3-5 years when an AI native solution disrupts them (large enterprises more likely to think this way as they think in 3-5 year buying cycles)
One possible “something else” explanation is everything consolidating to the hyperscalers… the breadth of their solutions across apps and infrastructure is significant, and they’re viewed as AI winners
https://x.com/jaminball/status/1796688723217936543
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